Bill Would Allow Formation of `Risk-Retention' Groups

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WASHINGTON (AP) - Business and other groups beset by soaring liability insurance costs could get some relief under little heralded legislation making steady progress toward President Reagan's desk.

The measure, approved Tuesday by the House, is far more modest than the major overhaul of the nation's product liability insurance laws currently under debate in the Senate.

But it seems destined to prove more politically acceptable to a Congress that has been split over liability insurance measures by conflicting pressures from the insurance industry and trial lawyersgroups.

The bill would enable business, governmental, professional and other groups caught in the liability cost crunch to save money by insuring themselves or forming groups to buy insurance.

Similar to legislation already approved by the Senate, the bill won approval on a voice vote, with Rep. Jim Florio, D-N.J., declaring consumers must ""never again be left with no alternative to traditional forms of insurance.''

The measure would pre-empt state laws barring businesses and others from forming such so-called risk-retention groups. Differences between the bill and its Senate counterpart must now be resolved.

The risk-retention plan amends a 1981 law that provides such groups with a green light to band together to buy product liability insurance or self-insure against product liability risks.

The new version would expand that authority to include all forms of liability insurance.

In the Senate, critics of the product liability overhaul plan sponsored by Sen. Bob Kasten, R-Wis., first sought to table, or kill, the measure. Then, for tactical reasons, they deserted their own cause. The tabling move fell short by the unusual margin of 96-0.

Kasten chortled afterward that the critics wanted to avoid going on record as being against the legislation, which has broad business support.

Actually, Sen. Ernest F. Hollings, D-S.C., took to the floor again to denounce the product liability insurance ""crisis'' as a ""$6. …